The firm commented today, Oracle delivered a downbeat fiscal first quarter, missing revenue consensus by $102 million (inclusive of 1% currency headwind), while non-GAAP EPS consensus missed by $0.03 (which management attributed to a combination of a higher tax rate, higher interest expense, and a stronger dollar). Oracle guided second-quarter revenue below consensus by roughly $200 million, although SaaS/PaaS revenue is expected to grow 78% to 82% (ahead of the Street consensus of 76% growth at the midpoint). Midpoint non-GAAP EPS were guided $0.04 below the Street, though management again attributed much of this to higher interest expense (from the new debt issue) and a higher-than-expected tax rate. Management also reiterated its expectation that non-GAAP operating margin should rise in fiscal 2017 over fiscal 2016 (this will not be easy after the first-half margin performance).

Estimate revisions:

Second quarter (fiscal second quarter 2017)

Revenue: $9,067 million (up 1% year-over-year)

Non-GAAP EPS: $0.61 (down 4% year-over-year)

Fiscal year 2017

Revenue: $37,235 million (about flat year-over-year)

Non-GAAP EPS: $2.61 (about flat year-over-year)

Fiscal year 2018

Revenue: $37,735 million (up 1% year-over-year)

Non-GAAP EPS: $2.77 (up 6% year-over-year)

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